NAICOM Cites Impacts Of FX, Inflation On Insurance, Hopeful Of Pulling Through

By CLEMENT NWOJI, Uyo

The National Insurance Commission (NAICOM) has revealed that the current foreign exchange crisis and the inflationary trend have impacted on insurance sector just as it is being experienced in other sectors of the economy.

Commissioner for Insurance and Chief Executive Officer of NAICOM, the apex regulator of insurance sector, Mr. Sunday Thomas, disclosed this Thursday during interactive session with Journalists in Uyo, Akwa Ibom state.

He, however, expressed optimism that the negative impacts will elapse as the federal government strives to stabilize the economy through various initiatives.

The NAICOM boss explained that as usual in times of this level of exchange rate and inflation, assets replacement becomes an issue.

Under the present circumstance, Mr Thomas said those who are wise, need to adjust the value their assets in order to derive maximum benefits because when the value is increased, it means more premium to pay.

According to him: “When we have this less level of exchange rate, assets replacement becomes an issue, and when you get to the position where assets that were acquired at a particular amount, especially assets that are foreign exchange dependent, people are not quick to revalue there assets.”

He further stated that where there is inflation such as the present situation, life insurance is worst affected.

“Of course, the fact is that where there is inflation, life insurance is worst hit because the value of your claim will be badly affected.

“But you see what we are going through as nation, I believe that it is temporary. Two things had happened, the issue of subsidy removal and the issue of consolidation of the exchange rate. All these are at the point of policy change and there are bound to be push back.”

“So, what we are experiencing now are all push back, push back is bound to affect every sector of the economy.

“But if you look at what is happening now, the exchange rate is adjusting itself downwards. However, there are things still being done and by the time, the entire initiatives materializes, definitely it will fine its level.”

The NAICOM Chief Executive expressed optimism that even if the level didn’t revert as it was before, but it will be as bad as currently being experienced.